An autonomous division or organizational unit,
small enough to be flexible and large enough to
exercise control over most of the factors
affecting its long-term performance.
Because strategic business units are more they
allow the owning conglomerate to respond
quickly to changing economic or market
A strategic business unit (SBU) is a profit
centre which focuses on product offering
and market segment.
SBUs typically have a discrete marketing
plan, analysis of competition, and
marketing campaign, even though they
may be part of a larger business entity.
An SBU may be a business unit within a
larger corporation, or it may be a business
unto itself or a branch. Corporations may be
composed of multiple SBUs, each of which is
responsible for its own profitability.
General Electric is an example of a company
with this sort of business organization.
SBUs are able to affect most factors which
influence their performance. Managed as
separate businesses, they are responsible to
a parent corporation. General electric has
There are three factors that are generally
seen as determining the success of an
1.the degree of autonomy given to each
2.the degree to which an SBU shares
functional programs and facilities with
other SBUs, and
3.the manner in which the corporation is
because of new changes in market.
Strategic Business Unit ModelStrategic Business Unit Model